PRINCIPAL CHIEF ENGINEER Vs. M.B. CHETTRI

JUDGEMENT

(1.) In this first appeal against the judgment dated 24.1.94 passed by the learned Addl. Dist. Judge, Sikkim against the dismissal of the objections filed by the appellant under Sec. 30 of the Arbitration Act and making the award of the arbitrator rule of the court, only point for decision is whether the validity of an award can be challenged on the ground of the award being in excess of the jurisdiction of the arbitrator, being beyond the reference having been made to him, merely on the basis of oral arguments when no such objection was taken in the application filed under Sec. 33 of the Arbitration Act within the period of limitation prescribed for such an application.

(2.) The respondent is a Government contractor. Parties entered into an agreement on 18th July, 1981 regarding construction of a road. Differences arose between the parties. The respondent issued a notice to the department for appointment of an arbitrator in terms of the arbitration clause. On the department's failure to comply with the notice, he filed an application, which was registered as Civil Misc. Case No. 1 of 1984 in the Court of the District Judge, Sikkim, under Sec. 20 of the Arbitration Act for appointment of an arbitrator and for making an order of reference in respect of the differences and disputes that arose between the parties. Vide judgment dated 26.6.1985, the learned District Judge allowed the application and appointed an arbitrator and made a reference of the disputes specified in paragraph 10 of the judgment to the arbitrator and further directed in paragraph 11 that he shall proceed with the arbitration to settle 'the said points' in accordance with the provision of the Arbitration Act. The arbitrator made an award on 11.6.1993 awarding a total amount of Rs. 12,41,028 and also Rs. 100 by way of cost of stamp duty and filed the same in the court. Objections were filed by the appellant under Sec. 30 of the Arbitration Act praying for sitting aside the award alleging that the award was bad on account of errors apparent on the fact of records. Seven alleged errors were specified in the objections and it was pleaded that the errors indicated that the arbitrator did not apply his mind while making the award. In the reply filed against these objections, the contractor alleged that the arbitrator had considered all the points raised in the objections and since the award was a non-speaking award, there was no scope for analysing the award or for probing the mind and the mental process of the arbitrator by which he arrived at the decision.

(3.) The objections were apparently not tenable. The validity of the award could not be challenged on the ground that the award was bad on the face of the record. Even no attempt was made by the learned Advocate General who appeared before the learned District Judge to show as to how the award was erroneous on the face of record or on the face of the award. Instead, the award was challenged as invalid on two other grounds which had not been taken in the objections; these grounds being : (a) the arbitrator decided matters outside the norms of reference and (b) the amounts awarded by the arbitrator are disproportionately high, which errors were covered by the words "or is otherwise invalid" in clause (c) of Sec. 30. Shri S.P. Wangdi, the learned counsel appearing on behalf of the contractor before the learned Trial Court and also in this court, urged before the learned Trial Court that both the grounds urged by the learned Advocate General being now grounds not stated in the application were barred by limitation. On the other hand, the learned Advocate General submitted that since the objections related to the jurisdiction of the arbitrator to make the award, the objections could be taken even at the time of arguments after the period of limitation had expired for filing an application under Sec. 33. After referring to several authorities, the learned Trial Court held that all the objections for setting aside the award must be taken by means of an application within the prescribed period of limitation and the objections taken by the learned Advocate General having not been so taken, the pleas of the learned Advocate General could not be entertained. Further, it held that the objector had not taken any objections regarding the jurisdiction of the arbitrator during the arbitration proceedings, and, therefore, on the strength of the decision in Union of India Vs. Manipur Association, AIR 1977 Gauhati 5 the objector was estopped from challenging the jurisdiction of the arbitrator after the award want against the objector.